Supplier Contracts: Elevate Compliance, Optimize Performance & Continuously Monitor

Supplier Contracts: Elevate Compliance, Optimize Performance & Continuously Monitor

If you’re like most large companies out there, you’re aware that your supplier contracts have inefficiencies, leakage, and aren’t delivering all the benefits they should. What if there was a new way to manage supplier contracts? One that unlocked every contract’s true potential. One that combined the best of tech intelligence and human intelligence into a single service. One that didn’t just fix bad contracts, but created smarter contracts.

In this conversation, PRGX Contract Management VP Jim Albrecht discusses how PRGX successfully partners with companies to deliver Contract Compliance, Contract Optimization, and ongoing Contract Monitoring. Discover how PRGX’s unique approach—built on decades of audit expertise, robust contract data, and secure AI technology—transforms supplier contracts into a competitive advantage.


Q: Jim, when you talk to procurement leaders, what is the biggest challenge they’re facing right now?

A: Well, you know, procurement leaders lack confidence. They’re realizing the benefits they have negotiated in their supplier contracts. They dedicate so much time and effort to the RFP process and selecting the proper supplier or suppliers, and then working with legal on both sides to get the contract terms negotiated and executed.

But in the end, they’re not confident that all of this effort has resulted in an improved position for their organization.  They ask, how do I know? Or better yet, how can I know for certain?

Q: Many companies, as we know, take a retroactive look at their contracts with contract compliance. Your team is an industry leader in contract compliance. But what about taking it to the next level? What is the value of having a proactive contract performance program?

A: Good question. You know, in most cases, the objective of a contract compliance program is to recover cash for historical overcharges. And a byproduct of this activity is identifying points of leakage that can be addressed and mitigated. The next step in improving contract performance is really taking a high-level view of your contracts to determine what can be improved. In some cases, an audit will not identify an area of potential leakage because the contracts don’t really specifically address an area of spend.

You know, for example, there may be costs passed on because the contract is silent on how to handle the supplier may say, we’ve always passed this cost along, but without the contract saying one way or another, there’s no way to know for certain if that was the original intent or not. PRGX contract optimization services evaluate the financial terms of the contract in its entirety and provide best in class recommendations to improve your position in the relationship. Many times, the supplier is the expert in their field, and the contract reflects that. Our contract optimization service levels the playing field and provides you with improved visibility to what you’re agreeing to.

And then how do you know these contract changes have had the desired impact? Coming in behind contract optimization exercise with a real time evaluation of the subsequent billings provides peace of mind with our continuous monitoring service, which reviews current billings even prior to payment to ensure they are accurately reflecting the changes made.

Q: So, Jim, if you’re a procurement leader, what’s the key to getting contracts to work for you, especially to that best-in-class level.

A: The key is really to ensure your contracts are written in a way that provides you with the best protection, and again, levels the playing field with the supplier to be sure you are getting the best value for your investment. This can be accomplished by optimizing your contracts most effectively across entire individual spend categories.

To be sure suppliers are operating under the same set of rules to more easily evaluate their performance for the value they are being paid. The PRGX contract management service, which includes contract compliance coupled with contract optimization and continuous monitoring, helps provide peace of mind.  Your suppliers are being paid fairly while your organization is receiving the rate of return needed to be successful.

Q: So I’d imagine some procurement leaders see the problem but are concerned about upsetting supplier relationships. What do you say to them to reassure them?

A: That comes up occasionally where supply, where clients will ask, you know, how are the suppliers going to respond to something like this? And really the point is they’re a strategic supplier of yours, so they’re, they’re likely to have already gone through this kind of process before with another client of ours or, or in this industry.

And so, they’re used to this type of thing, but it also says, “Hey, you’re an important supplier to us and, and we want to make sure that the contract accurately reflects the relationship between the two of us.” And if there’s any need for improvement, we want to address that proactively instead of finding out years later that things are not going well.

Q: I will say to your credit, I’ve seen feedback you get from suppliers, it’s quite the opposite of acrimonious, right? It’s complimentary and it’s a recognition that there’s mutual benefit in the process.

A: Yes, there certainly is. Um, yeah, many times be because our team is so professional and we’ve got a lot of experience doing this type of thing the suppliers really understand or come to a quick, quickly come to an understanding that our people know our professional and know what they’re talking about. And so, when they’re asking questions, they’re good questions. Um, and when issues are mitigated, we can mitigate them pretty quickly, understand that if the story is being told is accurate, that that’s something that really does address the situation adequately. And, so they, they know that they’re being treated fairly and transparently through the whole process.

And, and in the end, they really do appreciate the process and the results of it. Even if they have to pay something back, they understand that we’ve been fair in our review and that we’ve been, you know, very, very complete and honest with them.

Q: Jim, thanks.

A: You’re welcome.

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